A Tale of Two (or Three?) Markets in Sonoma County Real Estate
As we enter 2008, everyone is wondering what this year will bring for the real estate market.Â Â Typically January sees relatively low inventory levels as sellers wait to bring their homes on the market for the conventionally busy spring buying season.Â Many properties that didn’t sell in the previous year are withdrawn for the holiday season and brought back on in the new year.Â Â According to Ann Scherbert’s post, the situation is similar in parts of San Francisco.
How to know what to expect as spring comes on?
Â In looking at this winter’s inventory levels, it is interesting to see the disparity in three distinct Sonoma County real estate markets.Â Â Market activity here varies greatly depending on location and price point but some cities on an aggregate level appear to be more hurt by the slowing market and morgage trends.Â For example, Santa Rosa inventory levels are down this January over the peak last summer and fall.Â However there are nearlyÂ 1100 single family homes for sale versus just over 700 at this timeÂ last January.Â Â There remains a lot of undigested inventory from last year and some incredible bargains are to be had.
In Healdsburg and Sebastopol, levels are very similar to last January’s, and still showing a seasonal adjustment.Â Â What do you think that bodes for each marketin terms of prices?
You can see that in Sebastopol, inventory figures have trended down from a peak in August of 2006 and are actually over 10 percent lower than a year ago at this time.
Â Â Healdsburg inventory levels are just slightly (10%) higher than last January with a much smaller sample size than Santa Rosa, certainly within the same ballpark as a year ago.Â Both Sebastopol and Healdsburg are smaller communities than Santa Rosa, and real estate values there tend to trend higher and to attract a higher percentage of second home or lifestyle buyers than Santa Rosa as an overall percentage of sales, whereas Santa Rosa has a much larger chunk of entry level homes and larger scale housing tracts, which have been more impacted by the subprime mortgage crisis.Â Â Â How will this glut at the lower end ultimately effect our higher end market?Â Â Â Kevin Boer has an excellent post on this phenomenon in the mid-peninsula market of the San Francisco Bay Area.Â I’ll comment in more detail on this topic and prices in another post.